I have a math continuance from a previous math question that was completed. attached is the completed part 2 and now I have attached Part 3 that I need to complete.
Theresa Gass-Williams
Bryant & Stratton College
MATH201026
College Mathematics
Prof. S.Vaitsas
May 25, 2024
Debt and Expenses
Calculate your Debt-to-Income Ratio
Ratio calculation
Transportation $200 Miscellaneous $200 Gross Monthly Income $5000
= (200+200) /5000
=400 / 5000
=8%
According to most lenders a debt-to-income ratio of below thirty-six percent is good. My 8% means that I have a great ratio and could secure funding whenever required. It would be very hard to secure a loan if the percentage was above fifty.
Calculate your Life Insurance Policy
Life insurance calculation
=$80 * 10
=800
Dependents of the life insurance are either qualifying relatives or children of the payer. However, the spouse cannot automatically claim to be a dependent; others like brothers, sisters, parents, and stepchild can claim the payment. A younger person should buy insurance cheaper than the older person. This is because the younger person’s premiums are lower. Older people are bound to get health problems that make them disqualified or have more expensive premiums.
Calculate your Retirement Savings
The calculation
33 years *12 = 396
$500 monthly retirement savings
= 396 *500 = 198,000 (retirement at 65)
38 years *12 = 456
456*500 =228,000 (retirement at 70 years).
Based on the calculations above, I believe that I am saving more than the national average for my retirement. However, at 65 years, I will not have saved enough and would like to extend my work to 70 years. The actions I will take to increase my savings are reducing my expenditure and increasing the savings to $600 monthly. This could be done by lowering other bills.
Calculate your Emergency Fund
Emergency fund calculation
= 610 + 300+320+200+300 = 1730
= 1730* 6 = $10380
Savings = 1070 monthly
= 10380 / 1070 = around ten months I will save for the six months expenditure.
Based on the calculation above, it will take me around ten months to completely save for the expenditure.
Reference
Ahn, M., Batty, M., & Meisenzahl, R. R. (2018). Household debt-to-income ratios in the enhanced financial accounts.
